Today everyone agrees that mobile data growth is explosive. Network operators are scrambling to handle this by building out or upgrading their 3G networks and also increasing support for Wi-Fi hotspots. Long term many of these operators are also looking at 4G (LTE or WiMax) as the ultimate solution for this capacity crunch. But in the meantime, rapid expansion of 3G networks and Wi-Fi hotspots seems to be the order of the day.
What implications does this have for 4G and its adoption by users?
As an avid user of my Wi-Fi capabilities on my smartphone I am thrilled everytime I see more Wi-Fi hotspots popping up in places I frequent. Many coffee shops, bookstores, airports, and public places are introducing more and more free Wi-Fi hotspots. Coupled with widespread 3G coverage for the times when I’m not near a Wi-Fi hotspot, I get my internet connectivity fix pretty much anywhere I go these days. While 3G speeds are slower than what I get from Wi-Fi hotspots, it is less problematic than I would have expected. I guess this is because of my usage pattern. I require the high speeds of Wi-Fi when I’m looking at things such as youtube or downloading a big presentation to my laptop. Basically things that I usually do when I’m sedentary – for example when I’m in a coffee shop or a library. For things that I’m interested in while moving, such as quick email checks or listening to Pandora Internet radio, 3G networks speeds have been more than adequate. In fact, I’ve found that even letting my kids view youtube in a moving car works fine as well. I don’t think I’m an unusual case in how I use my smartphone.
When 4G is introduced it is supposed to enable operators to offer a better service than 3G. For example, Verizon Wireless says they have seen upto 12Mbps download for LTE vs 1Mbps for 3G. But an interesting point to remember is that average 4G speeds in best case real world scenarios (~ 12Mbps as described by Verizon Wireless) will usually be equal or slower than Wi-Fi. Note, that the 12Mbps from LTE will have to be shared between many customers connected to the same base station, so each individually will see a much lower rate. Wi-Fi because of its simple nature, will always be shared only by those in the immediately vicinity, inherently allowing individual rates to be still fairly high.
So as a customer I face an interesting issue. With a 3G + Wi-Fi smartphone, I’m getting pretty good service. Adding 4G to the mix, does not look as if it will significantly make my life better. Operators believe that this may be a temporary state of affairs. As more smartphones proliferate they believe the 3G networks will become congested and I may end up not so happy with my 3G speeds. Hence their logic for deploying 4G networks as soon as possible. But they are deploying 3G even more rapidly in many cases and at the same time they say they will not have issues. And even if the 3G networks become a little congested, if the places where I require high speed access are places where I can easily get Wi-Fi access, does it matter ?
So what would convince me to move to an 4G offering ? What is the game changing must have aspect that will make it me lust for 4G ? I will lust for the speeds but Wi-Fi may satisfy my lust in many cases.
So I come back to the question – what will drive me to 4G ? And how can operators make money from 4G ?